The Coordination problem

The transition to the rule of law requires group action and thus, according to Olson (1965), creates the problem of collective action. Weingast (2003) tries to clarify this problem by using

“equilibrium institution approach to the rule of law”. According to him, the leaders will have incentives to stick to the rule of law only when they risk being deposed by citizens. Therefore, citizens must have the power to “police” behaviour of the state in accordance with the laws.

However, when policing the state, citizens face the problem of coordination. It is argued that not only in the rule of law reform, but people in whole society always face the problem of coordination. In their social interaction, one side can never be certain of what the other side is about to do (e.g. Voigt 1999b, p. 89).

The coordination problem is due to the divergences of the people’s positions in society, which makes it difficult for them to get common views and interests (see Weingast 2003).

Consequently, there are great differences in how people view the appropriate role of the state, political structure and citizen rights (p.110-111). These profound differences, in turn, hinder citizens’ coordination against the state. For the emergence of the rule of law, Weingast thus suggests a coordination device which he calls a pact laying down citizens’ rights and a set of

public decision making rules. However, it is necessary to satisfy three further conditions: (i) parties in the pact must agree that they are better off in the pact than without it; (ii) parties agree to change their behaviour so that the others simultaneously doing so and (iii) parties must be willing to defend not only the parts of the pact benefiting themselves but also the parts benefiting others against state transgression (Weingast, 2003, p. 111 - 112). Yet, there may be another coordination dilemma because it seems to be impossible to convince all parties (or interest groups) that they will be better off in the Weingast’s “rule of law” pact.

Furthermore, it can be questioned how parties could be able to go beyond their uncertainty about the behaviour of the others in the pact in order to be willing to defend the others from state transgression.

To explain this dilemma, I assume that a specific society consists of two citizen groups: a privileged group and a less privileged group. The privileged group tends to oppose the rule of law because of two reasons: First, in the view of privileged group, they will not be better off after the reform towards the rule of law. The rule of law reform only induces uncertainties for their life, thus they resist any change. However, not only the privileged group but also the society as a whole tends to oppose social and institutional change due to the same reason. I will analyse this problem in details in the next chapter.

Second, there is the fact that privileged group could earn more benefits from the no rule of law. According to economists, people always act in their self-interest. Presuppose that the rule of law is a zero sum game, the privileged group thus regards any move towards the rule of law as an outcry of the less privileged members in pursuit of reallocation benefits resources of the society. This may undermine the privileged group interests (Zhou 2001). For such reason, the privileged group will have negative view and oppose the reform to the rule of law as in the case of Russia (see e.g.: Stiglitz and Hoff, 2002). Given the facts of economic reform in China, Peereenboon (2002) also observes that economic reforms in China have fostered clientelist and corporatist arrangements in which the newly emerging social groups such as business people form alliances with the government. They are neither liberal nor predisposed toward democracy since they frequently are more interested in guarding jealously their privileged access to power than in broader political reforms.

Nguyen An Nguyen (2006) makes similar observations with regard to Vietnam, where there is an increasing threat of reform distortion made by interest groups. Before Doimoi, he points out that, on the one hand, there were no independent interest groups in the planned economy

was difficult to influence state policy since there was a high degree of centralization of state powers. After Doimoi, when the market economy emerged in Vietnam, interest groups expand more and more rapidly and they get giant benefits from influencing state policy. As pointed out by Nguyen An Nguyen, there are conservative interest groups who get benefits from their privileged position in society. Therefore, they obstruct the reform progress.

Although their benefits are very small in comparison with the whole reform benefits, the less privileged groups who can receive reform benefits, however, have no way to influence state policies.

Obviously, the rule of law may not be a zero sum game. Its introduction can improve the situation of both the upper and the lower class. It is worthy to note that because of the distrust among people in a lawless society, more and more people within the privileged groups will also realize that playing by certain rules would actually be in their own interests. For such reason, they will support the rule of law. Consequently, if they can get rid of their short-sighted interests, members of the privileged group would defend the rule of law system that provides for predictability and certainty. However, by using the well-known mechanism of divide and conquer, a dictator can take the advantage of envious disputes between privileged groups and less privileged groups to delay the transition process to the rule of law in particular and political freedom in general. Weingast (2003) shows that, on the one hand, the dictators can transgress the rights of some citizen groups. On the other hand, they make their efforts to protect privileged interests for other citizens in order to retain their support sufficient in number to keep them in power (2003, p. 111). As a result, the obstacle to the emergence of the rule of law is the arbitrary and discretionary powers of government which hinder the people effort to solve their coordination problem.

To summarize, the arguments in this section emphasize the importance of constraint mechanisms of the state powers which have been already mentioned in chapter II. In order to overcome the coordination dilemma of the transition to the rule of law, it is in need of an efficient constraint mechanism in order to limit arbitrary powers of government. However, in the next section, I will show that the political and institutional reform in Vietnam has failed to establish an effective mechanism in constraining arbitrary powers. As a result, arbitrary discretion of government can be regarded as a current main obstacle to the rule of law reform in Vietnam.

IV. Arbitrary discretion of government: obstacle to the rule of law in Vietnam